Mosler Economics

Massive losses piling up, even with gov funding for employers to keep employees on the payroll. And this number doesn’t include those who lost their jobs and aren’t eligible for unemployment comp. Massive layoffs continue even with gov funds to employers to keep employees on the payroll: Tariffs still in place and talk of increasing them… A bit of a bounce but still at depression levels: Well below depression levels:

Private payrolls fell by over 2 million after the PPP was in place to keep workers on the payroll. This is a forecast for Friday’s employment release: After a large contraction the rate of contraction naturally slows down, but it’s still contracting: If this turns out to be the case, it’s a drop of some $3 trillion of sales/income which is a larger drop than the increase in federal deficit spending: Below 50 is contraction: This increase will show up as an increase in...

Income is what supports and ’causes’ sales. When income falls, sales in the first instance need deficit spending- spending that exceeds income- to grow employment/output from prior levels. The GDP forecasts include income/sales from public deficit spending as well as private sector deficit spending. The risk I see is private sector deficit spending falling short of the (implied) forecasts: The euro area is also at risk that total deficit spending will be insufficient....

Nothing good Friday’s headlines:

Now that more data is out, looks like GDP will be down by over 1/3 for the quarter, as the negative labor supply shock continues. While fiscal policy works to support incomes and spending (GDP) obviously spending is still falling short, and with it private sector income (GDP=sales=income). This story doesn’t change much until people start returning to work which restores incomes, output, and spending. Until then business has to make due with that much less total spending....

Oil related capital expenditure has collapsed, and likely won’t come back until investors have confidence prices will stay high enough long enough: Mortgage applications for home purchases have bounced back a bit but remain depressed, even with ultra low mortgage rates:

Down 50% and only about one month was due to the virus:

Unemployment claims had been historically low for quite a while because they had been made harder to get: The EPI survey estimated between 8.9 million and 13.9 million more Americans would have filed for claims over the past five weeks had the process been easier. “These findings on the millions of frustrated filers and the UI (unemployment insurance) system’s low payment rate highlight the need for policies to improve rather than hinder the UI application process,” the...

More of same, won’t bore you with the rest: